Choosing a loan is something that should be done by taking the time to consider a number of factors. For Ruben, who is keen on applying for a personal loan in order to finance wedding costs, he has to ask himself a number of questions beforehand.
There are key questions to ask before choosing a loan.
Have I checked my credit report?
Before choosing a loan, you need to know your credit score. You need to check your eligibility before applying. There are ways to repair your credit score before choosing a loan. If you score below the required criteria, then you at least have a chance to improve before applying again.
Do I really need credit?
Ask yourself if you genuinely need the loan. Check for alternative sources of funding before applying. Your reason for applying for the loan is important. Ruben could consider reaching out to family members for a loan. Depending on the arrangement, his family may not charge him interest, working out in his favour at the end of the day,
Will I be able to afford loan repayments?
Ruben needs to take a close look at his finances, so he can gauge if it’s sustainable. It may be best to opt for a fixed interest rate, which will help you keep your budget relatively stable. He should have a steady source of income to ensure that he can repay the loan when payments are due every month.
Do I need this type of loan?
Ruben should consider his financial goals prior to applying. He should be clear about his intentions for the funds. This is one of the key questions to ask before choosing a loan, because it provides true answers to the type of loan you will apply for.
How long will I be paying the loan?
The loan term will determine the length of time for which you are going to be indebted. Think about how much you will be repaying in the long-term. If he is not willing to be repaying this debt over a long period of time, it may be time to reassess.